|
 China's factory growth eased to an expected six-month low in
January, hurt by weaker local and foreign demand, and heightening
worries of a wide slowdown across emerging markets. That weighed
across most markets such as Asian shares and base metals as
investors found a new reason to sell high-risk assets.
Brent crude slipped 10 cents to $106.30 a barrel by 0359 GMT,
extending losses after declining the most in a month on Friday. It
earlier touched $106, its lowest since Jan. 20.
U.S. oil dropped 40 cents to $97.09, after settling 74 cents lower
and falling the most in a week.
"Brent is suffering from the emerging market turmoil that is
spreading across most markets," said Tetsu Emori, a commodity fund
manager at Astmax Investment. "But specific to Brent are supply
disruption fears from Syria, Iraq and others. That is helping
support prices."
Oil also weakened after breaking past a few key technical support
levels in the previous session, Emori said.
Both the contracts are poised to fall further in February as prices
usually weaken during the month, Emori said. Brent may slip to as
low as $103 a barrel and the U.S. benchmark to $92 during the month,
he said.
"We could see prices touching the bottom for the year in February,"
Emori said. "February will be an important month to start buying for
the year."
DOLLAR, IRAQ
Yet a strong dollar helped put a floor under oil.
The dollar index held near a two-month high set late last month
following robust U.S. economic data that reinforced views the
world's biggest economy has weathered the emerging markets turmoil.
That would enable the Federal Reserve to keep reducing its stimulus,
which would boost the greenback further.
A strong dollar weighs on commodities such as oil that are priced in
the currency.
[to top of second column] |
Investors were also watching the unfolding unrest in Iraq. The
country's army intensified its shelling of Falluja on Sunday in
preparation for a ground assault to regain control of the city,
which has been under the control of militants for a month.
Sunni Muslim anti-government fighters, among them insurgents linked
to al Qaeda, overran Falluja in the western province of Anbar on
Jan. 1, against a backdrop of deteriorating security across
fast-growing oil exporter Iraq.
Crude exports from Iraq declined in January to an average of 2.23
million barrels per day (bpd) but should rise next month, Oil
Minister Abdul Kareem Luaibi said on Saturday.
Luaibi attributed the drop from 2.34 million bpd in December to
attacks on the pipeline carrying oil from the northern Kirkuk
oilfields to Turkey, as well as disruption to shipping from Iraq's
southern ports due to bad weather.
In Syria, military helicopters dropped more improvised "barrel
bombs" on the northern city of Aleppo, a monitoring group said,
bringing the death toll to at least 83 people in the latest episode
of a campaign that many consider a war crime.
The nation is not key in terms of oil shipments, but markets have
been worried about the crisis in the country spilling across the
Middle East and engulfing major exporters.
(Reporting by Manash Goswami; editing
by Tom Hogue)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
